What to Do If You Miss the Tax Filing Deadline

The IRS is expecting more than 155 million returns to be filed this tax season, but if you don’t think you’ll get yours in before the day is out, here’s what you should do:

File an extension. You can file for an extension electronically by submitting IRS Form 4868, Application For Automatic Extension of Time To File U.S. Individual Tax Return. This can be done quickly and will give you until October 15th to file your tax return. Unfortunately, the extension only applies to your tax return.If you owe taxes, you are still required to pay on time. Pay as much as you can up front to minimize penalties and interest charges that could end up being 25% of the unpaid amount.

Avoid penalties. If you don’t file a request for an extension and miss the tax filing deadline, you will only be penalized if you owe taxes. There are no penalties for filing a late return if you are due a refund. If you owe money to the IRS, they may charge penalties for late filing and late payment as well as interest on the amount you owe. However, IRS will consider reducing late filing fees if you can show a reasonable cause for being late.

Pay in installments. If you can’t afford to pay the full amount that you owe within 120 days of the tax deadline, you can request an installment agreement, which allows you to make monthly payments to the IRS. You can apply for a payment agreement online at www.irs.gov/opa or by completing Form 9465, Installment Agreement Request. The cost of setting up an installment agreement ranges from $31 to $225, and depends on how you set up the payment agreement and how you make your payments. If you establish your payment agreement online and agree to pay via direct debit, you will only be charged $31 in fees.

Keep in mind, if you’re owed a refund, there’s no penalty in missing today’s deadline. But if you owe money, the sooner you pay it the better. And even if your request for installments is granted, you will be charged interest and any applicable penalties on the amount you owe, until the balance is paid in full.

For more information on money management and financial matter, check out MySmartMoney.com.